LT Foods Ltd, the owner of basmati rice brands Daawat and Royal, has identified the ‘Convenience & Health’ segment as a key growth driver for the company. The company aims to generate 8 to 10 percent of its revenue from this category in the next five years. This move comes as LT Foods capitalizes on the increased consumption of ready-to-cook and ready-to-eat products, particularly following the pandemic.
Ashwani Kumar Arora, the MD & CEO of LT Foods, stated, “Our goal is to generate 8-10 percent of total revenue from the third vertical (convenience and health) over the next five years.” The company entered this segment about four years ago, initially extending its brand Dawat to the US market and later expanding it to the Indian market.
LT Foods has achieved impressive growth in this segment, with a 3-year compound annual growth rate (CAGR) of 30 percent. Currently, this segment contributes 2.5 percent to the company’s overall revenue, but its year-on-year growth has surged by an impressive 36 percent.
Monika C Jaggia, the VP of Finance & Strategy at LT Foods, emphasized the importance of the convenience and health segment as a growth enabler for the company. Leveraging existing brand recognition and distribution, the company aims to expand its market presence in this category.
In addition to focusing on the convenience and health segment, LT Foods has set ambitious revenue targets. The company aims to become a billion-dollar company in the current fiscal year and exceed Rs 10,000 crore in revenue over the next four years. Currently, 60 percent of LT Foods’ revenue comes from international markets, while the remaining 40 percent is generated in the domestic market. The company holds over 50 percent market share in some markets, such as the US, under the Royal brand.
LT Foods operates under three verticals, including Basmati and Other Specialty Rice, Organic Food and Ingredients, and Convenience and Health. The company is committed to growing its presence in the core specialty rice business and convenience and health segments through organic and inorganic means. This includes investing in marketing, brand-building initiatives, consumer insights, and product innovation.
LT Foods may also consider acquisitions to further expand its presence in the convenience and health segments. The recent government restrictions on Basmati rice exports below $1,200 per tonne are not expected to significantly impact the company, as it is a branded player and sells its products at higher prices.
Furthermore, LT Foods is actively working with farmers in various regions, such as Madhya Pradesh, Punjab, and Haryana, to promote sustainable rice sourcing. It collaborates with farmers on Sustainable Rice Production (SRP) programs and promotes organic cultivation. Currently, the company is working with more than 70,000 farmers in this endeavor.
Aside from India, LT Foods’ global brands source rice from other countries to meet their requirements. The company operates manufacturing facilities in India, the Netherlands, the USA, and the UK.
LT Foods’ strategic focus on the convenience and health segment, along with its commitment to sustainable sourcing and brand expansion, positions it for continued growth and success in the market. With its well-established brands and strong distribution network, the company is well-positioned to capitalize on the increasing demand for convenient and healthy food products.